South Asia free trade zone takes effect
Sun January 1, 2006 05:25 EST .
- - The South Asian Free Trade Area, encompassing India, Pakistan, Nepal, Sri Lanka - , the Maldives, Bangladesh and Bhutan, will benefit the region's 1.5 billion people, 60 percent of whom are poor, Commerce Minister Kamal Nath said. Under the agreement, the free trade area's more developed countries India, Pakistan and Sri Lanka - will reduce their customs duties to between 0 and 5 percent by 2013.
Less-developed Bangladesh, Nepal, Bhutan and the Maldives have until 2018 to reduce their tariffs.
A South Asian free trade zone was first proposed two decades ago, but the initiative moved slowly because less-developed countries feared they would lose too much revenue from lower customs duties.
Leaders of the South Asian Association for Regional Cooperation, or SAARC, agreed at a summit in Pakistan in January 2004 to forge ahead with the free trade zone.
Nath said the arrangement would benefit the entire region, which is home to about one-fifth of the world's population.
``Implementation of South Asian free trade agreement will further strengthen our trade relations with the SAARC countries,'' Nath said after India's Cabinet ratified the agreement on Thursday.
India, as the region's leading economy, has agreed to compensate poorer countries for lost tariff income.
Published: Sun Jan 1 13:22:15 EST 2006